|Bid||0.00 x 1100|
|Ask||0.00 x 800|
|Day's Range||201.32 - 204.49|
|52 Week Range||140.84 - 211.15|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||5.76%|
|Beta (5Y Monthly)||0.97|
|Expense Ratio (net)||0.18%|
The past five years have not been good for buyers of value stocks. The iShares S&P 500 Growth ETF (NYSEARCA:IVW) delivered a return of more than 70% between 2015 and 2019 compared to a 41% return for the iShares S&P 500 Value ETF (NYSEARCA:IVE).Overall, value stocks have been underperforming their growth brethren since at least 2007.InvestorPlace - Stock Market News, Stock Advice & Trading Tips"The narrative that actually explains the performance is that value has been getting cheaper and cheaper. It's gone from trading at about one-third the valuation multiples of growth stocks to roughly one-eighth the valuation multiple," Research Affiliates chairman Rob Arnott told CNBC in December.Arnott went on to suggest that if the economy slows down at some point in 2020, growth stocks will have nowhere to hide -- leaving value stocks to attract the lion's share of the buyers. * The Top 5 Dow Jones Stocks to Buy for 2020 To find my 10 value stocks to own in 2020, I will recommend one stock from the top-10 holdings of the iShares Russell 1000 Value ETF (NYSEARCA:IWD), a second stock from the 11th-largest weighting through the 20th, a third stock from the 21st-largest weighting through the 30th and so on, up to the 100th-largest stock.To make things even more diversified, I'll make sure my picks represent at least nine different sectors.May the best value stocks win! Value Stocks to Own in 2020: Comcast (CMCSA)Source: Ken Wolter / Shutterstock.com My first selection is Comcast (NASDAQ:CMCSA), the cable company that's transformed itself into a massive creator of television and movie content in recent years.Over the past 52 weeks, CMCSA stock has delivered a total return to shareholders of about 33% -- more than six percent greater returns over the same period. Trading at 14.4 times its forward earnings and 2 times sales, Comcast is a good value stock to own if you believe people will continue to watch television and movies.In 2020, look for Comcast to bring out its Peacock video streaming service to compete with the plethora of other services already out there."The upcoming streaming service will cost Comcast $2 billion in investments. Management expects costs peaking at 1% of Comcast's revenue, but that the service will achieve breakeven by the fifth year," InvestorPlace's Chris Lau stated in late December.Add in its legacy cable business, along with Universal Parks and Resorts, and you've got the makings of a great long-term hold. Activision Blizzard (ATVI)Source: Casimiro PT / Shutterstock.com My second selection also comes from the communication sector. With nine sectors to choose from, I had to double up somewhere.Having read an article about the 7 Reasons Why Video Gaming Will Take Over, choosing Activision Blizzard (NASDAQ:ATVI), one of the world's leading video game publishers, seemed to be the right call.Over the past year, ATVI stock delivered a decent total return of about 28% -- comparable to the markets total return of nearly 27%. I'm confident it can do a whole lot better. Trading at 25.5 times its forward earnings and 6.8 times sales, it's not exactly cheap. However, given the potential of gaming and esports over the next decade, you have to pay up for potential growth.My InvestorPlace colleague, Luke Lango, recently called ATVI, one of the 15 best stocks own in 2020. He believes the introduction of the first new video game consoles since 2013 is a big reason to get on board. * 7 Earnings Reports to Watch Next Week In December, I doubted ATVI could get to $80 in 2020. My colleague's comments, however, have me questioning my original thoughts. In either case, this value stock is a long-term buy to hold for years to come. McDonald's (MCD)Source: 8th.creator / Shutterstock.com Next up from the value stocks camp are consumer discretionary stocks.Although it lost $4 billion in market capitalization in a single November day when McDonald's (NYSE:MCD) CEO Steve Easterbrook was fired for having a relationship with an employee, it's managed to claw back some of those losses in the two months since.Over the past 52 weeks, MCD stock -- thanks in part to Easterbrook's dismissal -- delivered a less-than-stellar total return of 20.2%, underperforming the markets by a considerable amount.Trading at 25 times its forward earnings and 7.8 times sales, it's priced like it's the best restaurant stock on the planet. It can't afford to go into a sales funk in 2020, or investors could see MCD stock trading under $200 for an extended period.Nonetheless, as InvestorPlace's Josh Enomoto said about the Golden Arches recently:"McDonald's is a proud member of the dividend aristocrats. It has increased its payout consistently over a 43-year period. If a downturn were to impact the markets, MCD stock is a name you'll want to own."I couldn't agree more. Coca-Cola (KO)Source: Fotazdymak / Shutterstock.com If I could only own two stocks in a recession, McDonald's and Coca-Cola (NYSE:KO) would be about as good a one-two punch as I can think of.Sure, Coca-Cola's struggled mightily in recent years to remain relevant in a world that's moved on from the company's syrupy drinks. But CEO James Quincey has made some big moves to make sure it stays a major player in the world of non-alcoholic beverages.Trading at 24.8 times its forward earnings and 7.3 times sales, it's neither cheap nor expensive -- but it is what I would term as fairly valued with room for growth. * Breakthrough Stocks: The Companies Set for Major Gains in 2020 However, as I said in September, in addition to the company's great products, it's got some equity investments that are likely to take off in 2020. Add to it a 2.8% yield, and you've got a value stock to stick in a drawer if there ever were one. Phillips 66 (PSX)Source: Jonathan Weiss / Shutterstock.com The thought of owning fossil fuel-related stocks in an era of renewable energy might seem pointless. But until we can turn off the oil switch, there still is a place in your portfolio for a company like Phillips 66 (NYSE:PSX).It's a quadruple threat with pipelines, refineries, chemicals business and gas stations.InvestorPlace's Aaron Levitt recently called PSX a value stock that generates real cash flows from its diversified business model. When it comes to energy stocks, Levitt knows his stuff. If he likes Phillips, I have to go along with him.Currently, PSX stock is trading at 10.1 times its forward earnings and just 0.4 times sales. So, if I have to own an energy stock, this is one of the few I'd be comfortable holding despite the fact it underperformed the markets over the past year.Furthermore, it might not be Warren Buffett's favorite stock -- that honor goes to Apple (NASDAQ:AAPL) -- but he still owns around $535 million or 1.2% of the company. Berkshire Hathaway (BRK.A, BRK.B)Source: Jonathan Weiss / Shutterstock.com JPMorgan (NYSE:JPM) just reported the most profitable year for a U.S. bank in history. It was so good, President Donald Trump was asking for thank you's from the company. Further, analysts are starting to come around about bank stocks in 2020.So, why recommend Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) as my pick for the financial sector?For one, Berkshire's top-10 holdings include a lot of banks; A total of $67 billion to be exact. Secondly, BRK is ready for a breakout year. Over the past year, it's managed a total return of just 16%. This is well below the 28% return for the entire U.S. market. Trading at only 19.3 times its forward earnings and 2.2 times sales, it isn't overvalued relative to its peers. * 7 Financial ETFs to Buy Besides, it's a great way to play Apple indirectly and another great value stock. Anthem (ANTM)Source: Jonathan Weiss / Shutterstock.com In November 2018, I recommended Anthem (NYSE:ANTM) stock to readers, arguing that CEO Gail Boudreaux was one of seven women whose companies were worth an investment. Since then, the provider of medical benefits to more than 40 million Americans in 14 states through Blue Cross Blue Shield has underperformed the markets as a whole.However, the same can be said for UnitedHealth Group (NYSE:UNH), another big provider of healthcare plans. Over the past year, Anthem and UnitedHealth have nearly identical annualized total returns around 17%.It's not a coincidence that since President Donald Trump has taken office, companies like Anthem and UnitedHealth have underperformed the markets. The White House is intent on dismantling Obamacare. And in the end, while this might be good for Anthem, the uncertainty scares away investors. Trading at 13.5 times its forward earnings and 0.8 times sales, ANTM stock is considerably cheaper than UNH. While I like them both, Anthem is the value play of the two. Caterpillar (CAT)Source: Shutterstock Of the 100 top stocks in IVE, 12 are industrials -- including Caterpillar (NYSE:CAT). Except for General Electric (NYSE:GE), which had an excellent rebound year in 2019, performances for the sector weren't anything to write about. CAT's one-year return was half the market as a whole.A few of my InvestorPlace colleagues appear positive about the year ahead for the world's largest manufacturer of heavy equipment; And why not. With a 16% global market share, it still has a big part to play in the global economy.IP contributor Larry Ramer believes several macroeconomic factors will boost CAT stock in 2020:"Caterpillar's valuation of less than 14 times analysts' average 2020 earnings per share estimate is a real bargain in this market, where so many stocks are overvalued," Ramer stated in early January. "And its 2.8% dividend yield will pay investors to wait in case the market takes a while to realize that many macro trends are moving in Caterpillar's favor." * 5 Not-So-Hot Stocks to Sell in 2020 Caterpillar's been down, but it's not out. And it is just another one of the great value stocks to add to your portfolio. Prologis (PLD)Source: rafapress / Shutterstock.com In the world of logistics real estate, Prologis (NYSE:PLD) is a giant.InvestorPlace contributor Louis Navellier, who got his reputation with growth stocks, recently recommended PLD stock amongst a group of seven real estate investment trusts."Prologis is the stock you want if you're a true believer in the world of e-commerce. It's the largest industrial real estate company in the world," Navellier stated Jan. 10. "It has facilities all around the world. And by its $56 billion market cap, you can be sure it's a major player in this sector."Having followed the exploits of Amazon (NASDAQ:AMZN) very closely in recent years, I don't see how you can't be a true believer. Retail has become an omnichannel affair, and logistics real estate is how companies like Amazon win the game.Trading at 47.9 times its forward earnings and 18.5 times sales, it's not exactly a legitimate value play.However -- as my colleague suggests -- with growth slowing around the world, Prologis' 2.3% yield ensures that your hard-earned capital will outperform inflation in 2020 and beyond. Intel (INTC)Source: canon_shooter / Shutterstock.com Of all 10 stocks on this list, I would argue that Intel (NASDAQ:INTC) is the most legitimate value play of the bunch. Not only does INTC stock trade at a ridiculously low 12.4 times its forward earnings and 3.8 times its sales, but the $14.7 billion in free cash flow (FCF) generated over the trailing 12 months results in a free cash flow yield of 5.3%. This is based on an enterprise value of $276.4 billion. By comparison, Apple's FCF yield is 4.2%, based on an enterprise value of $1.38 trillion. You can argue whether this last stat makes Apple an even better value play than Intel or not. I'll leave that for another day. Nontheless, what's hard to deny is that a company that generates as much free cash flow as Intel does should not be trading for less than $60 a share.Intel might not get the glory like Advanced Micro Devices (NASDAQ:AMD). But when it comes to financial strength, Intel wins hands down. And all of these factors make it just another member of the great value stocks.At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The Top 5 Dow Jones Stocks to Buy for 2020 * 7 Fintech ETFs to Buy Now for Fabulous Financial Exposure * 3 Tech Stocks to Play Ahead of Earnings The post The 10 Best Value Stocks to Own in 2020 appeared first on InvestorPlace.
Value-oriented ETFs are beginning to pull ahead, but some investors remain skeptical of a full on rotation and attribute the sudden shift as a short-term blip. In the recent market rebound, value stocks have been outpacing the market. Big value fund managers, including those from Hillman Funds, Artisan Partners and Eaton Vance, revealed they are taking the rally in value stocks to selloff some of their best performers in exchange for those that are further out of favor, reflecting views that the market shift to value will not last, Reuters reports.
For the most part, growth stocks have had a really good 2019 as stabilizing global economic conditions have converged on plunging rates to create an ideal investment backdrop for long duration assets. The iShares S&P 500 Growth ETF (NYSEARCA:IVW) is up more than 20% year-to-date. But one growth stock that has come up short in the big 2019 rally is Square (NYSE:SQ) stock.Source: Jonathan Weiss / Shutterstock.com In 2019, SQ has struggled with competition concerns and slowing growth trends against the backdrop of a rich valuation -- a combination which has ultimately resulted in SQ stock rising only 12% year-to-date and being down 30% over the past year.Will the struggles in SQ stock continue? I don't think so. At $60, the long-term bull thesis on Square stock looks incredibly compelling from a fundamental valuation perspective. At the same time, the optics surrounding Square stock should improve over the next few months, and that improvement should inject confidence back into the investor base.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Industrial Stocks to Buy for a Strong U.S. Economy Net net, I think the fundamentals and optics underlying SQ stock lay the groundwork for a compelling reason to buy the stock at $60. Will it run higher immediately? Probably not. But does it have immense upside potential from here in a multi-quarter to multi-year window? Absolutely.As such, for investors who are willing to be patient, SQ stock looks like a great buy here. The Fundamentals Are Very AttractiveThe story on Square is pretty easy to understand. Everywhere, all across the globe, consumers are pivoting from cash to non-cash payment methods, such as card and digital payments. In order to keep up with this secular pivot, merchants, retailers, and restaurants everywhere need to adopt payment processors which handle all types of payments. Square sells these payment processors.So do a lot of other companies. But Square is differentiated in three big ways. First, they've built a software ecosystem surrounding their payment processors which helps merchants of all sizes modernize, digitize, and automate workflows. Second, they've built this ecosystem to be particularly advantageous for small-to-medium sized businesses who are often behind the curve on modernization and digitization. Third, their payment processors come in all shapes and sizes -- ranging from a mag-stripe smartphone attachment, to a full-on register -- so that merchants can sell whenever, wherever, and however they want.Thus, the core growth narrative here is that as cash increasingly becomes obsolete and card payment volume continues to grow, Square will leverage its unique advantages to grow relevance, reach, and share across the global retail world. That was a $24 trillion world back in 2018, of which Square only controlled about 0.35%. In the long run, then, Square has a tremendous opportunity to sustain 20%-plus revenue growth for a lot longer, which should drive healthy margin expansion through positive operating leverage.Zooming out, Square projects as a 20%-plus revenue grower into 2025, with sizable upside margin drivers. Net net, that paves a tangible pathway for EPS to $4 by 2025. Based on a payment processing average 30-times forward multiple and a 10% discount rate, that equates to a 2019 price target for SQ stock of $75. The Optics Will ImproveTo be sure, the fundamentals have pointed to a 2019 price target for SQ stock of $75 for some time now. Yet, Square stock has languished around $60 for over a month.Clearly, Square stock needs a catalyst outside of "it's undervalued" to shoot shares higher.That catalyst could come over the next few quarters as the optics surrounding the stock materially improve. This breaks down into three parts. First, I expect the broader financial market backdrop to improve over the next few months as trade tensions ease (neither side wants the trade war to escalate further), U.S. consumers spend big during the holiday season (everyone is working and making more), and rates remain low (inflation is muted everywhere). Click to EnlargeSecond, SQ stock is showing resilience at a multi-year support line narrowly above $60. The lower $60's have proven to be a "bottoming" area for Square stock twice before since mid-2018, breaking only once during the late 2018 stock market wipe-out. If Square stock does indeed hold this lower $60's level again, then technical traders will rush into the stock, and that will provide an upward lift for the stock.Third, I think the numbers will get better from here. Square's revenue growth has been decelerating recently, but it should stabilize over the new few quarters as new investments start to yield healthy returns. These investments include the roll-out of Orders API to help merchants manage order fulfillment, the build-out of the Cash App ecosystem, the launch of Square Terminal in Australia, operational expansion among bigger merchants, and more. Bottom Line on SQ StockIt's been a rough ride in SQ stock over the past year, But this turbulence is to be expected after SQ stock rallied about 700% from mid-2016 to mid-2018. * 10 Stocks to Buy for September In other words, in the big picture, the past 52 weeks of weakness in Square stock is a just a blip on the radar -- a minor consolidation period in a long-term uptrend. Importantly, the growth fundamentals here remain highly favorable, and because of such, SQ stock can and will move significantly higher in the long run.As of this writing, Luke Lango was long SQ. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 3 Artificial Intelligence Stocks to Buy * 7 Industrial Stocks to Buy for a Strong U.S. Economy * 3 Beaten-Down Bank Stocks to Buy and Hold for the Long Term The post 2 Big Reasons to Like Square Stock at $60 appeared first on InvestorPlace.